Hadley’s Find the Plan Right for Me questionnaire, explained

What state do you live in?

Hadley asks this to route users to the top-rated plan that maximizes their federal and, if applicable, state tax benefits (some states do not offer state tax breaks).

Americans can enroll in other states’ 529 Plans. The majority of Americans have no incentive to enroll in their own state’s plans, but some do. If your state offers additional state tax breaks when you enroll in your own state’s plan, we recommend the top-rated plan sponsored by your state. If you are part of the majority of Americans who have no incentive to enroll in their own state’s plan, we recommend a plan rated gold by Morningstar.

Who are you saving for?

  1. Myself

    If so, when do you anticipate going to school? (years from now)

  2. My Child (or another family member)

    If so, how old is your child?

  3. My Future Child

    Yes, you can start saving for a child who hasn’t been born yet!

This question asks the user to identify the intended beneficiary of the 529 account.

If saving for an existing child, knowing the age of the beneficiary is required for Hadley to recommend a plan that is most appropriate for the beneficiary’s age. This is relevant if the user prefers an age-based plan that becomes increasingly conservative over time as the beneficiary approaches 18 years old or as the target enrollment year approaches.

If the user is saving for a future child, and if the user prefers an age-based 529 plan (see next question), then we recommend age-based plans that correspond to age 0 for the beneficiary.

If the user is saving for their own education, and in the event the user wants a plan that has an age-based approach (see next question), then we recommend age-based plans that correspond to the age that equals the number of years until the target date, subtracted from 18. For instance, if a user wanted to save for her own education and wanted to use the funds in 5 years and also wanted to use an age-based approach (see next question), Hadley would recommend for her an age-based plan that corresponds to age 13 (18-5=13).

As I get closer to needing to tap into my education savings fund, I prefer to gradually shift to more stable investments.

More stable investments are less likely to lose value, but also less likely to post gains.

  1. Agree
  2. Disagree
  3. I'm not sure

This question asks the user to select their preference for age-based or static plans.

This question guides the user to understand that as it gets closer to the time when the user needs the money for their first qualified education expense (for example., their first tuition payment), the investments in an age-based plan gradually shift into more conservative assets that reduce the risk in your portfolio, but also reduces the growth potential.

Users who responded “Agree” should enroll in age-based plans shift gradually over time in a “set it and forget it approach,” meaning that your portfolio’s asset allocations automatically become increasingly conservative as the target enrollment year approaches. The age-based portfolios have been especially designed for beneficiaries of a given age. For this reason, the majority of American 529 account holders are in age-based plans. For users who select A , Hadley recommends age-based plans that correspond to the age based on your responses from Question 2 (see above).

Users who responded “Disagree” do not want their investments to auto-shift into gradually more conservative portfolios, so Hadley recommends these users to enroll in Static Plans whose risk profiles remain fixed over time.

Hadley humanizes the process around saving for education because some users may lack the financial sophistication to understand this question. An option “I’m not sure” is made available. In these cases, Hadley recommends enrolling in age-based plans to the age you entered from Question 2 (see above). If you’re not sure, Hadley recommends age-based portfolios because they have been professionally and strategically curated by the 529 Program’s program and investment managers based for beneficiaries of a given age.

Which best describes your personal approach when it comes to growing your education savings?

  1. Conservative

    I’m risk-averse and prefer the safe route.

  2. Moderate

    I’m open to a little fluctuation in values, emphasis on ‘a little’.

  3. Aggressive

    I’m a high-risk, high-return kind of investor, and understand that the potential for larger gains also means the potential for larger downward swings.

  4. I don't know

    Not sure? No problem. We’re here to humanize the process and can walk you through additional scenarios to help find the right plan for you.

This question asks the user to select their own personal savings style. Some investors are comfortable with wide market swings, and others prefer less fluctuation with a generally lower return potential. It’s important to keep in mind there’s no right or wrong answers to this question: it’s based on what feels right and comfortable to you.

For users who self-identify their risk acceptance, Hadley recommends plan options that align to their preferred risk acceptance level of conservative, moderate, or aggressive.

For users who are unsure, they are encouraged to select “I don’t know.” Hadley humanizes the process around saving for education because some users may lack the financial sophistication to understand this question. An option “I’m not sure” is made available. In these cases, Hadley guides the users through scenarios in questions 5-8 to understand the user’s personal savings style when it comes to their risk acceptance levels.

For questions 5-8, users tally their points to determine whether their overall personal savings style is conservative, moderate, or aggressive.

What if your 529 account had $35,000 at the start of the year, but dropped to $29,750 a year later—that’s a 15% decrease. How do you think you’d react?
I would:

  1. Revise my entire portfolio

    A portfolio dropping 15% makes me way too nervous, and would keep me up at night.

  2. Move part of my portfolio, and keep the rest where it is.

    Some of my funds would go to more stable investments, while others would remain where they are.

  3. Stay the course

    I have a long-term perspective for my education funding assets. I’m willing to accept short-term portfolio losses if it means potentially higher returns in the long run.

This question assesses the user’s risk tolerance, acceptance, and preference. This question goes to the heart of what we mean by Risk Tolerance -- the ability to stay the course in the face of declining portfolio values.

Choice A: 1 point
Choice B: 2 points
Choice C: 3 points

Unexpected things happen, and external factors might cause you to take out money from your education savings 529 account prematurely. How likely is it that you will keep all your contributions in the plan until the funds are needed for school expenses?

  1. Not likely

    I can think of many reasons why I might not maintain the money in my plan for the full proposed period.

  2. Somewhat likely

    I would try not to touch the funds, but I can envision a couple of situations where I would need to remove money from my plan early.

  3. Very likely

    I have adequate insurance coverage and emergency funds set aside, so I feel quite confident I won't need to take funds out of my plan prematurely.

This question is designed to confirm the user’s investment time frame and to assess the user’s staying power, which is the degree to which an investor feels comfortable staying in the market and not selling out of a position when an investment has fallen in value.

Choice A: 1 point
Choice B: 2 points
Choice C: 3 points

Adding funds to your account periodically helps to reduce overall portfolio risk. How often will you add funds to your 529 account?

  1. I don’t plan to make future contributions to this account.
  2. I plan to make contributions as I’m able, but probably not every year.
  3. I plan to contribute about the same amount each year, and/or also anticipate receiving 529 gift contributions from friends and family.

This question focuses on how frequently you expect to make future contributions. Regular contributions create a form of income averaging, which reduces overall portfolio risk—allowing you to adopt a more aggressive initial allocation.

Choice A: 1 point
Choice B: 2 points
Choice C: 3 points

How important is hitting your investment goal?

  1. Important, but not critical.

    I’d like to save as much as I can toward my goal, but if I can’t, I have other resources available—like a potential increase in my job earnings, family help, scholarships, or other educational financial aid.

  2. Very important.

    If I don’t reach my goal, I might need to borrow more than I’m comfortable with. Heavy loans may impact my ability to save for retirement after I or my child start college. And I don’t want to burden anyone with extensive loans to repay soon after graduation.

To the extent that the user indicates that achieving education goals in mind isn't absolutely critical, the less aggressive the user needs to be with their initial asset allocation. Users who select Choice B run a risk of under-saving for their education goals, meaning that not saving enough may require more borrowing for tuition payment and other education expenses than the user might be comfortable with and will therefore run the risk of borrowing more funds as opposed to saving in a higher growth/higher risk plan, earlier on.

Choice A: 1 point
Choice B: 3 points

Tally the points from Questions 5-8. What’s your total? Find where your score lands on the risk acceptance scale below.

Conservative:
4 - 6.6
Moderate:
6.7 - 9.2
Aggressive:
9.3 - 12

Disclaimer: Most 529 Plans have menus broken out by conservative, moderate, and aggressive tracks, but some 529 Plans offer just one blended risk option. In the cases where we recommend a blended risk level plan, it’s because the plan is top-rated, has low fees, and maximizes your federal and any eligible state tax breaks.

This document is not meant to be nor should it be considered investment advice. Hadley utilizes the information in the “Find the Right Plan for Me” Questionnaire in order to deliver the most appropriate 529 Plan recommendations; accurate responses are critical to this mission.

Please download the Hadley app to receive your free 529 plan recommendation. The material contained on this website is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or investment strategy and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with her or her financial professionals. Past performance is no guarantee of future results. There can be no assurance that any investment will achieve its objectives or avoid substantial losses.

All research and other information provided on this website has been prepared for informational purposes only and Hadley Investment Co. assumes no liability or responsibility for any errors or omissions in the content of this website or any linked website.